What is your view on company FD i,e mahindra finance FD which is offering 9% interest. This is having FAAA ratng and looks safe/secure according to rating. Is there any risk on investing on the same?
Ask yourself a first question. When Banks are offering you the FD rates at around 6.5% to 7.5%, then why these companies offering at higher return? Are they doing social work by offering higher interest rates for investors? The answer is NO right? To give you 9% interest, they have to lend the money where the lending rate should be more than 10%.
Do remember that CREDIT rating may change at any point of time in the middle. Hence, never be in a wrong notion that today’s so-called safe/secure rating will not remain same throughout your invested period.
Hence, if you know all these risks and still looking for HIGHER return, then go ahead.